India’s solar module manufacturing industry is likely to undergo major consolidation over the next three to five years as overcapacity and rapid technological changes put pressure on smaller players, analysts at ICRA said on Thursday. India currently has around 110 GW of authorised module capacity under the Approved List of Models and Manufacturers (ALMM). However, only 70–75 per cent of this capacity can adapt to newer technologies such as TOPCon and bifacial modules, the analysts noted. While module manufacturing capacity is expected to rise to 165 GW, annual solar installations are likely to remain in the 45–50 GW range, creating significant overcapacity. Bifacial modules generate electricity from both sides, while TOPCon cells offer improved electron flow and reduced losses. These technologies require substantial investment, making manufacturing increasingly scale-driven and capital-intensive. Girishkumar Kadam, Senior Vice-President and Group Head at ICRA, said the industry requires integrated operations across the value chain, which not all players can sustain. Consolidation, he said, is therefore inevitable. The government’s plan to encourage domestic cell manufacturers to integrate backwards into wafer and ingot production by 2028—aimed at reducing dependence on Chinese imports—will add further financial pressure on companies. The anticipated shake-up coincides with a crowded market and falling module prices, driven by global oversupply and China’s continued dominance of the solar value chain. Indian module exports to the United States, a key market, are also expected to slow due to investigations into Chinese content in Indian products and higher tariffs, ICRA said. Ankit Jain, Vice-President and Co-Group Head at ICRA, said players using older technologies or operating only module lines are likely to be the first to exit. Companies with deeper vertical integration—producing cells, ingots and wafers—are better positioned to benefit in the long run.